The European Commission yesterday announced the Denmark-based company had been handed the largest fine as part of a €161.2m financial penalty involving four other firms - Tecumseh, Appliances Components Companies, Embraco and Panasonic.
Danfoss spokeswoman Markela Dedopoulos told FoodProductionDaily.com the illegal activity had been carries out by a “rogue element” within the firm’s German operations Danfoss Flensburg GmbH without the knowledge of any management.
Earlier this year, the company agreed to a plea agreement with the American Justice Department for US$3m. Investigations are continuing in Brazil, Mexico and South Africa, and there are pending civil lawsuits in the USA and Canada.
European action
Brussels said the group had been penalised after operating a cartel in the whole European Economic Area. The cartel focussed on commercial and household refrigeration compressors, used in fridges, freezers, vending machines and ice-cream coolers.
The price fixing ring attempted to co-ordinate European pricing policies in a bid to maintain a stable market share as part of a scheme to recover cost increases.
“To this end, the cartel members held bilateral, trilateral and multilateral meetings at which they discussed among other things prices and engaged in an exchange of sensitive market information”, said an EC statement.
Rogue element
Danfoss is a major producer of equipment for the food retails and commercial food and beverage industries. Its product portfolio includes bottle sorters, blow moulders, fillers, pasteuriser and palletisers.
The company said it first became aware of the case when the EC made unannounced inspections of several of its offices in February of 2009 and since then had cooperated with authorities.
“Danfoss knew nothing and was completely unaware of the cartel activities of the employees in Germany,” said spokeswoman Dedopoulos. “This rogue element of three employees was doing this without the knowledge of the management.”
The firm said it would pay the full fine in one instalment within three months.
“The rules are the rules and we have to follow them. According to the rules we did something illegal and we have to pay the fine,” she said.
Danfoss said it had not profited from the activities of the cartel, which is why it had not uncovered the illegal activity. The firm said it had set up an internal audit team as a result of the case.